Fake charity telefunding scheme shut down, AG says



An alleged telefunding charity scam — that made over 72 million calls in New York alone — has been shut down, officials announced Thursday.

Associated Community Services and related companies made over 1.3 billion deceptive fundraising calls across the country — collecting $110 million that they claimed would go toward charities helping veterans, children and firefighters, the Federal Trade Commission and attorneys general from 38 states alleged in a complaint.

In reality, little to no money was actually going to any charities — with the defendants keeping 90 cents of every dollar they collected, the Michigan federal lawsuit alleges.

Now, ACS, its related companies and employees have closed the operation down as part of a settlement in the case reached Wednesday. They must also pay $110 million, AG Letitia James’ office said.

One employee will have to sell her vacation home to help pay back the money, another will sell his ski boat and other employees will turn over cash, James’ office said.

“These telemarketers illegally solicited contributions from New Yorkers and inundated them with millions of harassing phone calls,” said James in a statement.

Starting in 2008, ASC and its other companies harangued 1.3 million people, calling individuals some as many as 5,000 times, James’ office alleged.

In the last three-and-a-half years, in New York ACS made 72.6 million calls, phoning 73,500 people over 10 times in just one week and another 477,000 two or more in an hour, James’ office claimed.

After a court approves the settlement, the money will be donated to legitimate charities similar to those the donors believed they were helping, James’ office said.

ACS lawyer Steven Wernikoff said, “My clients deny the allegations that were made against them, and have not admitted any wrongdoing in settling this matter involving actions from many years ago.

“They simply did not have the resources to defend against the government here.”


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